A prime minister for Macron’s decline – Mathias Thépot

There are no major differences in the economic field between President Emmanuel Macron and his new Prime Minister François Bayrou, so it is unlikely that the new government will change its policies.

In this phase of Macronian twilight, Bayrou was one of the last to celebrate without hesitation the “attractive” economic policy launched in 2017, an approach which according to the new prime minister is based on the flexibility of the labor market, on the reduction of taxes on capital and on the introduction of structural reforms (pensions, unemployment), as well as on the “courage” of his friend the president, with whom Bayrou “has been speaking three times a week for eight years”. Like the entire centrist bloc, Bayrou believes that this policy has allowed unemployment to be reduced by two percentage points since 2017.

Now that he is prime minister, Bayrou may be tempted to add his touch, first of all through the 2025 finance bill due to be presented to parliament during the first quarter of next year. Until then, in the absence of an approved budget, the special law will ensure the current affairs of the state. From this perspective, it is interesting to remember Bayrou’s obsessions in the economic field.

The best known concerns the need to drastically reduce public debt, which has always been a priority for him. It was the topic he insisted on most during the presidential election campaigns of 2007 and 2012, when he was the center candidate. “State debt, debt for the financing of local authorities, social security debt… We need to put a stop to it!”, he said in 2007, and then declared in 2012 that “the first duty of the state” was to “have prudent management ”. At the time, Bayrou even promised to bring the public finances into positive territory for the years 2016-2017, a result never achieved in fifty years. Even today he often mentions public debt – currently at 112 percent of GDP – defining it as a “morally unbearable” aspect which in his opinion represents “a burden that will fall on future generations”.

During the pandemic it seemed that Bayrou had dampened his enthusiasm. At the beginning of 2021, shortly after being appointed by Macron as high commissioner for the emergency plan, he proposed the allocation of 250 billion euros more for the relaunch of the French economy, in order to support “all strategic sectors of the future, which concern research and innovation especially in the digital field”. On the other hand, it was necessary to justify the existence of his high commission.

However, Bayrou is still convinced that it is possible to save elsewhere, be it in the state administration (even if since he became mayor of the city of Pau he is less strict on the management of local authorities), unemployment benefits or, above all, the pension system.

In early 2023, Bayrou developed a new craze, which he still talks about today: the “hidden” pension deficit. On France Inter the prime minister explained that “our pension system has long been in an extremely serious deficit situation: thirty billion euros every year. The state is forced to enter this sum to reach a balance” which would only be superficial. Bayrou raised the alarm: “The state no longer has money.”

The Prime Minister was received by the Pension Management Council (Cor) to illustrate his calculations. On that occasion he was not very convincing, but evidently according to him if this hypothetical hidden deficit had been made public, this would have allowed the population to accept the 2023 pension reform, because the French would finally understand the urgent need to modify the system to achieve balanced public finances.

It should be noted that in his mission to cut deficits, Bayrou is not just focusing on spending. The prime minister has never shown himself hostile to an increase (moderate, of course) in tax collection. This is one of the points in which he distances himself from the Macronians.

In 2012, for example, Bayrou proposed a reduction in the deficit of one hundred billion euros over five years, divided equally between spending cuts and revenue increases, in particular by reducing tax exemptions. Bayrou is one of the few exponents of the Macronist camp to have criticized the suppression of the patrimonial tax in 2018, arguing that it would have been better to limit itself to “exempting productive investments, those that go to factories and companies”.

It must be remembered that the origins of Bayrou’s political success in the 2000s lie in his departure from drift bling-bling of then president Nicolas Sarkozy, who promised a tax shelter for his billionaire friends. More recently, Bayrou attacked the criticisms of Macronists such as former Prime Minister Gabriel Attal and former Interior Minister Gérald Darmanin of Michel Barnier’s financial plan, which they said excessively taxed large companies and the richest. “It would be strange if the former majority criticized the new government for the effort to correct a budget that is actually its own,” Bayrou said in an interview.

All this leads us to believe that the new financial bill that will be proposed by the new government (if it holds) will not be too far from the one conceived by Michel Barnier’s executive, with cuts to public services and social security and a moderate increase in taxes for the super rich. Little more than a reheated soup, in short. ◆ as

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